In middle of high stakes game

The head of Australia’s construction industry watchdog, Leigh Johns, cops it from all sides when it comes to public criticism. Last week, high-profile union leader
Paul Howes
fulminated that the Australian Building and Construction Commission was “evil" and should be abolished.

This week, Johns was grilled in Senate estimates hearings by senior Liberal frontbencher
Eric Abetz
about the ABCC changing its focus to become a “full service" regulator which prosecuted employers as well as unions and workers. This includes an inquiry into the use of contractors in the building industry.

Abetz said at a hearing: “We had a previous discussion, Johns, about you not resigning your Labor Party membership. When we then read industry updates of such a highly politically charged nature, you might understand why some of us at least believe that you should forego that membership."

The comment from Abetz seems to have been treated as a statement rather than a question. Johns says he will not resign from the ALP and strongly defends the role and focus of the ABCC. He “utterly" rejects characterisation of the commission and its officers as “evil".

It must be said the Australian construction industry has had a “boots-and-all" workplace culture for many decades. Big money is on the line in huge projects where there are militant unions and tough bosses.

The Howard government created the ABCC in response to the 2003 Cole royal commission on the building industry. Unions object to a body that has royal commission-style powers to question witnesses and obtain documents and that is focused on workers in one industry. Labor has pledged to retain most ABCC powers while changing it to a division of Fair Work Australia. The Coalition and some employers argue it will be neutered, fostering union militancy and higher building costs.

Under former ABCC commissioner John Lloyd, the watchdog overwhelmingly focused on investigating and prosecuting union officials. Where employers were prosecuted, it was for being “union friendly" in paying workers when they were on strike.

Johns was the chief counsel at the Fair Work Ombudsman and has 16 years’ experience in workplace law, including stints at Mallesons and Holding Redlich. ALP sources say he was involved in a youth network for the ALP right faction at university, with such future Labor luminaries as
Bill Shorten
, and later stood in as a Labor candidate a local government elections.

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But Johns says it is “hardly remarkable" for a workplace regulator to cover the waterfront, as it were, sometimes prosecuting unions and workers and sometimes pursuing employers. He has defended the use of the ABCC’s controversial investigatory powers and introduced new checks and balances; but unions say it is still a kangaroo court.

Much of the present tensions arise from Johns announcing a national inquiry into “sham" contracting in the building industry at a time of widespread skill shortages and a boom of major projects in some sectors, particularly in resource projects. Sham contracting is when employees are disguised as contractors to avoid payment of legal entitlements such as minimum rates of pay, leave and superannuation.

The Master Builders Association says it will participate in the sham contracting inquiry, but has vowed that employers will “fiercely defend" contracting as a “legitimate and lawful form of carrying out the many specialised areas of building activities".

“Claims of ‘endemic sham contracting’ will need to be backed up by rigorous evidence," MBA chief executive
Wilhelm Harnisch
says. “The ABCC should not lose sight of the main reason it was set up, which was to deal with the violence and thuggery that is still present in this industry."

Johns may be a Labor man and he may be investigating a practice that infuriates unions, yet such is their rage at the ABCC they are boycotting his inquiry and are conducting their own “audit" of sham contracting by major builders. In recent weeks, workers have walked off the job in projects on the Gold Coast and in Perth over allegations that foreign workers are being employed with pay and conditions that undercut those of Australian workers.

On February 15, the Department of Immigration and Citizenship and the Australian Federal Police located 30 foreign construction workers who were working illegally in Canberra. The department said the group – one South Korean, one person from Hong Kong and 28 Chinese nationals – had been detained and transferred to Villawood Immigration Detention Centre in Sydney pending deportation.

The national secretary of the CFMEU’S construction division,
Dave Noonan
, says the union is raising concerns about sham contracting and foreign workers directly with employers and that they are mostly responding. “We’re only touching the surface of this problem."

Workplace Relations Minister
Chris Evans
was briefed this week by the Fair Work Ombudsman and ABCC to “ensure these reported instances are being properly investigated". According to the Minister: “Australian workers have priority for Australian jobs."

But temperatures will continue to rise. It went unreported that Johns told the Senate hearings that the ABCC was expanding its presence, including a focus on “sham contracting and foreign worker issues" in the ACT, where 17 per cent of building work is funded by the Commonwealth.

Johns also noted that the $25 billion Inpex LNG project in the Northern Territory would require up to 3000 workers at the peak off offshore construction in 2012. The ABCC’s present inquiries suggest a “high proportion of itinerant workers" in the NT and a “significant number" of workers with Australian business numbers (ABN) – required by contractors rather than employees. The ABCC is also allocating staff in the Pilbara: seven out of Australia’s 10 largest projects, worth about $126 billion, are being built or planned in the Pilbara, Barrow Island and the Burrup Peninsula.

Recently Johns told The Australian Financial Review he wanted to put his role into perspective. “One thing I won’t do is talk the industry down . . . we still have particular difficulties here in Victoria. We have a disproportionate number of investigations in Western Australia . . . most recently there’s been a bit of a burst in Queensland."

“In WA, in five out of the seven matters before the courts, [CFMEU official] Joe McDonald is a respondent . . . But outside of that, if you look at all the building and construction that’s going on in WA . . . you would have to say that the amount of unrest is actually pretty low."

“That then brings you back to Victoria where there are some continuing real problems in terms of a failure to acknowledge the rule of law, breaches of right of entry, unlawful industrial action, coercion and the like."

Johns singled out a case before the Federal Magistrates Court last year that saw CFMEU Victorian assistant state secretary John Setka fined $6000 (of a maximum $6600) for threatening two Bovis Lend Lease managers while exercising his right to workplaces as a permit holder. The penalties related to March, 2008 when Setka and other union officials entered the building site at ANZ’s Dockland headquarters.

The court heard Setka told Bovis employees: “This job’s a f---ing death trap and a disgrace. If you kill anyone on this job I am going to quit my f---ing job and get you." When one of the employees asked if Setka was threatening him, Setka replied: ‘I’m not f---ing threatening you, I’m f---ing promising, I will get you, and you.

Johns argued that unions were able to use lawful means to raise safety concerns. “You’ve got a very senior union official who ought to be demonstrating leadership in the industry, instead of behaving in a way that is unacceptable in any workplace."

“I hear comments about, ‘Look, it’s the cut and thrust or hurly burly of the construction industry’. I get that and I’ve been known to drop the odd word myself. But no one should expect to go to work and have the level of abuse and threats that Setka was found to have made."

“There he is talking about safety issues and he’s threatening the life of other people . . . It’s just pure hypocrisy."

Noonan says the court case related to a “difficult dispute" in which the company had been seeking to “de-unionise" sites, which had since been resolved without help from the ABCC.

So, maybe being bagged by all sides is a public regulator’s lot. It’s worth noting that Eric Abetz did not criticise Lloyd when he was ABCC chief for addressing the free-market HR Nicholls Society. Indeed, both Abetz and Lloyd are addressing the society‘s annual conference in April, along with former Liberal workplace minister,
Peter Reith
.